THE ARGUMENT AGAINST REGULATING INTERNET SERVICE PROVIDERS AS UTILITIES
If the U.S. government becomes the Internet's traffic cop, online service providers will lose their incentive to continue investing in projects that improve their networks and expand into areas that have little or no high-speed access. This would lead to less innovation and threaten millions of jobs, according to cable and telecommunications companies spearheading the argument for little or no regulation.
Adopting Obama's approach “would threaten millions of jobs and a diverse array of stakeholders,” warned Broadband for America, an industry trade group.
Last year, AT&T, Verizon, Comcast and Time Warner Cable invested a combined $46 billion in the U.S. on plants, property and equipment, according to estimates complied in an analysis by the Progressive Policy Institute, a think tank.
Internet service providers also argue that it would be unfair to codify regulations that would prevent them from ever recovering some of the costs for connecting to broadband hogs such as Netflix, whose service generates about one-third of U.S. online traffic during the evening hours on weekdays.
Netflix already pays Comcast, Verizon and AT&T an undisclosed fee for a more direct connection to their networks, an arrangement that could become unnecessary if Obama's recommendation is adopted by the FCC.
More regulation under rules created in a dramatically different era also threatens to bog down the Internet in more government bureaucracy and meddling. The 1934 Telecommunications Act would be the foundation of net neutrality, as envisioned by Obama, and it's not clear how much the law would be updated.
Broadband for America likened Obama's proposal to the efforts of governments in China and Russia to gain more control over the Internet.
